Breakoutwatch Weekly Summary 11/26/16
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| A Theory of Why Prices are Rising
while Volume is Falling The three major indexes and the Russell 2000 all set new highs this week but as our chart for the NASDAQ shows, they did so on declining volume that was well below the 50 day average. This is the second week in succession that we have seen this unusual situation. Normally, a rising market is accompanied by rising volume as buyers enter the market and push prices higher. A rising market on lower volume is usually a sign that the trend is weakening as the number of buyers decreases while sellers hold on to their positions. Looking at the chart below, there is no indication that the trend is weakening, despite the falling volume. Note that even on Friday the NASDAQ closed at a new high, despite truncated trading on a holiday weekend. So how can we interpret this anomalous behavior? The law of supply and demand says that if supply is scarce then goods become more expensive. Therefore a scarcity of sellers would cause buyers to bid prices higher to persuade the sellers to part with their holdings. So why would we have a scarcity of sellers in the current market? Well, it's generally believed that the Trump economy will deliver a massive stimulus in the form of tax cuts and infrastructure spending which will deliver higher corporate profits, but not until next year. So if you believe prices will rise substantially in the future then why sell today? So there you have it, there's a scarcity of sellers because institutions are betting that values will be much higher in the future.  As was the case last week, lower average volumes lead to fewer confirmed breakouts as our algorithms require above average volume to confirm a breakout. |
| No new features this week. |
| List | Breakouts | Avg. Gain |
|---|---|---|
| CWH | 6 | 6.71 |
| SQZ | 1 | 10.57 |
| HTF | 1 | 1.24 |
| HSB | 0 | |
| DB | 0 |
| Brkout Date | Symbol | Base | Squeeze | BrkoutOut Price | Brkout Day Close | RS Rank* | Last Close | Current % off BOP | Gain at Intraday High |
|---|---|---|---|---|---|---|---|---|---|
| 2016-11-22 | CLF | CWH | n | 7.85 | 9 | 99 | 9.91 | 26.24% | 26.62% |
| 2016-11-21 | STML | SQZ | y | 12.21 | 14 | 98 | 13.5 | 10.57% | 14.66% |
| 2016-11-22 | CNSL | CWH | n | 27.96 | 29 | 80 | 29.49 | 5.47% | 6.37% |
| 2016-11-23 | AQMS | CWH | n | 12.76 | 13 | 97 | 13.18 | 3.29% | 9.33% |
| 2016-11-22 | RUSHA | CWH | n | 28.54 | 30 | 87 | 29.41 | 3.05% | 3.82% |
| 2016-11-23 | DTYS | CWH | n | 19.09 | 19 | 84 | 19.59 | 2.62% | 3.4% |
| 2016-11-23 | MPO | HTF | y | 20.11 | 20 | 99 | 20.36 | 1.24% | 1.94% |
| 2016-11-21 | ETE | CWH | n | 17.37 | 18 | 90 | 17.3 | -0.4% | 15.08% |
| *RS Rank on day before breakout. | |||||||||
| Symbol | BO Price |
BO Vol. |
Company | Industry | RS Rank |
Last Close |
|---|---|---|---|---|---|---|
| MGI | 11.03 | 205,227 | Moneygram International - Inc. | Credit Services | 95 | 10.87 |
| JOY | 28.14 | 1,768,954 | Joy Global Inc. | Farm & Construction Machinery | 95 | 28.07 |
| LITE | 42.50 | 1,528,092 | Lumentum Holdings Inc. | Money Center Banks | 95 | 41.20 |
| CORR | 32.75 | 247,608 | CorEnergy Infrastructure Trust - Inc. | Asset Management | 95 | 32.64 |
| PCYG | 14.60 | 91,292 | Park City Group - Inc. | Business Software & Services | 93 | 14.20 |
| ETE | 18.02 | 8,699,116 | Energy Transfer Equity - L.P. | Oil & Gas Pipelines | 92 | 17.29 |
| These stocks meet our suggested screening factors
for our Cup and Handle Chart Pattern watchlist. See Revised Rules for Trading Cup and Handle Breakouts |
||||||
| Index | Value | Change Week | Change YTD | Trend1 |
|---|---|---|---|---|
| Dow | 19152.1 |
1.51% | 9.91% | Up |
| NASDAQ | 5398.92 |
1.45% | 7.82% | Up |
| S&P 500 | 2213.35 |
1.44% | 8.29% | Up |
|
1The Market Trend is derived from
our proprietary market model. The market model is described on
the sitehere.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements. |
||||
| 1 Week | 13 Weeks | 26 Weeks | Year-to-Date |
|---|---|---|---|
| Dow Jones |
Dow Jones 3.45 % |
NASDAQ Composite 9.43 % |
Dow Jones 9.91 % |
| 1 Week | 3 Weeks | 13 Weeks | 26 Weeks |
|---|---|---|---|
| Regional - Southwest Banks |
Sporting Goods Stores |
Manufactured Housing |
Silver |
| Music & Video Stores 108 |
Basic Materials Wholesale 139 |
Dairy Products 171 |
Manufactured Housing 213 |
| Charts of each industry rank and performance over 12 months are available on the site | |||
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